The Gross Loan Portfolio (loan volume) for the microfinance sector in Pakistan surged to Rs. 305 billion by the end of 2019.
The loan portfolio grew by an impressive amount of over Rs. 100 billion in merely two years inspite of the high markup rates of as much as 35% on the loans.
Microfinance banks such as Khushhali Microfinance Bank, Telenor Microfinance Bank, Mobilink Microfinance Bank, and U Microfinance Bank have aggressively enhanced the penetration of their services with a number of initiatives, marketing drives, new products, and new branches.
Other banks such as FINCA Microfinance are focusing on technological advancement to attract customers whereas Akhuwat, an Islamic Microfinance Institution, is working on diversified loan disbursement programs for its own, partner sponsored, and government-owned projects.
In 2019, it took lead over all microfinance banks and institutions on different achievement of business indicators.
Akhuwat has disbursed over Rs. 100 billion to 4 million beneficiaries since its inception.
The number of active borrowers in various cities stands at 7.24 million with an average loan size of Rs. 47,228.
The focus of lending and microcredit activities remains on the marginalized segments with 51% of total outreach attributable to women while 53% of outreach concentrated in rural districts.
However, the penetration of the microfinance sector seems active in Punjab with more than 5 million borrowers. It is followed by Sindh with 1.7 million borrowers. Borrowers of the microfinance sector stand at 0.163 million in Kyber Pakhtunkhawa and 0.115 million. The number of borrowers in Islamabad, FATA, FANA, and Baluchistan stands at less than 50,000.
Major borrowers belong to services and poultry sectors followed by trade, housing, production, and agriculture.
Microfinance sector recorded a handsome growth in footprint as the number of branches and offices operated by various microfinance banks and institutions increased to 4,036 in 138 various districts of the country.
Non-Performing Loans of the microfinance sector stand at over Rs. 10 billion.